Stephen A. Ross,
Massachusetts Institute of Technology
Randolph W. Westerfield,
University of Southern California
Bradford D. Jordan,
University of Kentucky
Gordon S. Roberts,
York University
| Aging Schedule | A compilation of accounts receivable by the age of each account.
(See Refer to page 688)
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| Captive Finance Company | Wholly owned subsidiary that handles credit extension and receivables financing through commercial paper.
(See Refer to page 680)
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| Cash Discount | A discount given for a cash purchase.
(See Refer to page 673)
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| Collection Policy | Procedures followed by a firm in collecting accounts receivable.
(See Refer to page 669)
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| Credit Analysis | The process of determining the probability that customers will or will not pay.
(See Refer to page 669)
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| Credit Cost Curve | Graphical representation of the sum of the carrying costs and the opportunity costs of a credit policy.
(See Refer to page 679)
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| Credit Instrument | The evidence of indebtedness.
(See Refer to page 675)
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| Credit Period | The length of time that credit is granted.
(See Refer to page 672)
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| Credit Scoring | The process of quantifying the probability of default when granting consumer credit.
(See Refer to page 684)
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| Five Cs of Credit | The following five basic credit factors to be evaluated: character, capacity, capital, collateral, and conditions.
(See Refer to page 684)
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| Invoice | Bill for goods or services provided by the seller to the purchaser.
(See Refer to page 672)
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| Just-in-Time Inventory (JIT) | Design for inventory in which parts, raw materials, and other work-in-process is delivered exactly as needed for production. Goal is to minimize inventory.
(See Refer to page 699)
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| Multiple Discriminant Analysis (MDA) | Statistical technique for distinguishing between two samples on the basis of their observed characteristics.
(See Refer to page 686)
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| Spread | The gap between the interest rate a bank pays on deposits and the rate it charges on loans.
(See Refer to page 683)
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| Terms of Sale | Conditions on which a firm sells its goods and services for cash or credit.
(See Refer to page669)
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2002 McGraw-Hill Higher Education